New Directions

Is American Capitalism a Failure?

Failure is very much in the eye of the beholder, because whenever there are winners there are also losers. Winners always think that things are just great, but the losers often have a different opinion. If there are lots more winners than losers we can usually say that something is a success, and when things don’t turn out so good and there are lots more losers than winners we can judge something to be a failure. It seems that an awful lot of people in Europe think that American Capitalism is a failure these days, and they intend to express their opinions to President Obama when he visits London on Tuesday.

There is little doubt that the present worldwide economic catastrophe has brought grief to millions, if not billions of people, and there is little doubt that the blame for the meltdown of the world’s economy can be laid at the doorstep of no-rules, Capitalist America. However, the question we should be asking is whether this current situation is a one-time thing or is it sort of like a chronic disease you have that remains silent for years and then, every once in a while, goes berserk and the your body is covered by oozing sores. It’s a good question because, if we care to glance back in time for a moment we can see that we have had similar economic catastrophes in the past – and all have been linked to no-rules capitalism.

It wasn’t for nothing that the richest men of the 19th century, like John D. Rockefeller, Cornelius Vanderbilt, Jay Gould and many others were called “Robber Barons”. All of these people built up huge fortunes because there were no regulations that could control their activities. The robber barons built monopolies and squeezed out their competition and then charged whatever price they liked for their goods or services. The country utterly depended on them – they were “too big to fail”, because the loss of any of these companies would spell ruin for America. Sound familiar?

It might be helpful to step back for a minute and consider the words “American Capitalism”. The reason they need to be considered is because there are a lot of wealthy people out there, like John McCain, who use these two words as if they are interchangeable. If you ask John McCain, or Rush Limbaugh for that matter, I would guess they would tell you that to be an American is to be a Capitalist. Capitalism is the American way – it’s who we are. Actually that isn’t exactly true.

If we look at the very first English settlers who came to America, the Pilgrims in Massachusetts and the colonists in Virginia they were far from being Capitalists. These states, and others were called “commonwealths”, i.e. the governments existed to promote the common good. In New England the early towns all had areas of land called the town common where anyone could graze their animals – the land was owned in common. Not very Capitalistic is it? The first battle of the American Revolution was fought on such a “Common”, Lexington Common, also called Lexington Green. So, I have to ask John McCain and his buddies: were the Pilgrims actually un-American? Weren’t they more like Socialists, and doesn’t that sort of make them equal to Communist Pinko Russians or something?

When did “no-rules Capitalism” take on the equivalence of the word “American”? It’s certainly not part of the philosophy of the founders of our country. It is only in the 19th Century, with the rise of the robber barons and the lack of governmental controls that no-rules Capitalism began to appear in America. It seems that it rose not by design but by default – no one realized at the time that rules and regulations might be required for some industries because they could easily become monopolies. No-rules Capitalism reared its head again shortly before the Great Depression when people were able to buy huge amounts of stock on margin without having the assets to cover a loss. This no-rules environment led directly to the stock market crash and the following Great Depression.

When Ronald Reagan became president he set about dismantling the government in the belief that “government is the problem”. As I noted in an earlier blog, he completely deregulated the airline industry with the result that today our airlines are barely surviving, our commercial airplane industry is barely hanging on, and while the wealthy enjoy the luxury of their corporate jets, the average person detests flying because of the lack of legroom, food, blankets and any other creature comforts that in the past made transcontinental travel enjoyable.

Now we are embroiled in a monumental economic disaster of such magnitude that only the printing presses of the United States Treasury can save us or the world. Of course the bill will come due for all this money – and guess who will pay? Not the 21st century robber barrons; no, it will be the taxpayers – the common people. The common people of the commonwealths of America have been indoctrinated to believe that no-rules Capitalism is the definition of “American” and anyone who questions this ludicrous fallacy is un-American. The truth is that no-rules Capitalism only serves the ultra-wealthy, the people who can manage to seize control of a valuable resource and build monolithic industries that exterminate their competition. In the end, no-rules Capitalism morphs into a giant game of Monopoly – and that is not capitalism anymore – nor is it American. It is a tyranny, a tyranny of oligarchs, by and for oligarchs, masquerading as freedom.

The message the people of Europe will soon be shouting to President Obama is this: the restoration of power to the ruling oligarchy is a mistake. No-rules capitalism has again and again been shown to be a dangerous and unsuccessful economic system. If there is one guiding principle that defines the true American philosophy of the founders of this country it is not total Freedom, it is Liberty.

John McCain, Rush Limbaugh, and their wealthy Republican buddies, not to mention the oligarchs, should learn the difference.

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